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What is the defining difference between the journal and the ledger?
AThe journal keeps running balances; the ledger lists events by date
BThe journal records events chronologically; the ledger separates them by account
CBoth record events in date order with no account separation
DThe ledger is filled in first; the journal is copied from it
Answer & Solution
Correct answer: B. The journal records events chronologically; the ledger separates them by account
1. The journal records all transactions chronologically as they happen.
2. The ledger separates that same information out by account and keeps a running balance for each.
3. Option A reverses the two roles; option C ignores the ledger's account separation.
4. The journal is written first and the ledger is copied from it, so option D reverses the order.
5. Therefore the journal is chronological and the ledger is by account.
_Source: Jonick, Principles of Financial Accounting (CC BY-SA 4.0), §1.3.4 "Ledger", p.15_
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